The business impact of technology failures is often substantial, as Verizon Wireless just discovered. Following an investigation with the FCC, the company agreed to credit customers who were erroneously charged for accessing data services on their cell phone.

The Federal Communications Commission had been investigating the alleged practice and said Sunday it would continue its formal probe, which could lead to additional penalties on the nation's largest wireless firm.

Verizon said that over several years, 15 million customers were charged between $2 and $6 for data services they didn't initiate. A source close to the company said Verizon Wireless will pay more than $50 million in refunds to current and past customers for the error.

As we reviewed customer accounts, we discovered that over the past several years approximately 15 million customers who did not have data plans were billed for data sessions on their phones that they did not initiate. These customers would normally have been billed at the standard rate of $1.99 per megabyte for any data they chose to access from their phones. The majority of the data sessions involved minor data exchanges caused by software built into their phones; others included accessing certain web links, which should not have incurred charges. We have addressed these issues to avoid unintended data charges in the future.

For some time we've been tracking how Verizon has been socking customers with a $1.99 data access fee on many phones -- which was incurred by users even if the phone was off or the battery was dead. Even users who had data access on their phones blocked were socked by the fee -- given that the message sent to users to tell them they couldn't get data consumed 0.06 kilobytes of data -- resulting in a $1.99 data fee.

The Verizon press release suggests the company also incorrectly charged some users for visiting Verizon Wireless websites.

More interestingly, it appears the browser built into certain Verizon cell phones would periodically contact the Verizion mother ship to exchange data, even if the user did not initiate those sessions. I would like to know precisely why those browsers phoned home and what kind of data exchange occurred.

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Michael Krigsman writes and speaks about technology in a manner that most observers consider to be fair and balanced. He maintains active personal and professional relationships with enterprise technology buyers, vendors, analyst firms (or individual analysts), consultants, and system integrators. As CEO of Asuret, Michael sells and delivers paid services to members of these same groups. Vendors regularly reimburse Michael's out-of-pocket travel expenses to attend industry conferences and events. Conference organizers frequently waive entry fees when Michael attends industry events. Michael often speaks at industry conferences and events.He is a member of the Enterprise Irregulars, a loose association of consultants, investors, industry representatives, analysts, and users of enterprise software.
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